2014 Best Practices Study

2014 Best Practices Study

Key Benchmarks

Population Density Agencies with Revenues UNDER $5,000,000

Profile

Revenues

Expenses

Less than 50,000

50,000 to 250,000

250,000 to 1,000,000

Over 1,000,000

Population Where Home Office is Located:

Profitability

% of Agencies Located in Each Population

20.4% 13.6%

6.4%

10.7%

Employee Overview

Net Revenue Growth (Organic)

7.3%

7.1%

7.4%

9.3%

Producer Info

Pre-tax Profit

22.0% 23.2% 21.9% 19.4%

Service Staff Info

Pro Forma Pre-tax Profit

27.2% 27.4% 23.8% 24.1%

Technology

Profitability as % of Net Revenues

Operating Pre-tax Profit

14.3% 15.3% 14.7% 12.1%

Insurance Carriers Appendix

EBITDA

25.2% 25.9% 24.6% 21.4%

Pro Forma EBITDA

30.3% 30.1% 26.5% 26.1%

Value Creation “Rule of 20” Score

21.3

20.8

19.3

21.0

Revenue per Employee

$139,349

$157,872

$161,489

$148,180

Productivity

Compensation per Employee

$74,872

$83,587

$88,089

$90,925

Spread per Employee

$64,476

$74,285

$73,400

$57,255

Commercial P&C

$101,761

$137,256

$106,136

$160,844

Personal P&C

$43,516

$74,348

$63,333

$60,023

Pay Levels for Producers

Life & Health / Financial

$64,598

$74,645

*

$107,141

Multi-Line

$99,545

$138,829

$140,436

$148,890

Commercial P&C

3.6

5.6

5.3

6.5

Total Number of Service / Sales Support Staff per Line of Business

Personal P&C

4.1

4.0

2.4

3.3

Group Life & Health

1.3

1.1

*

0.9

Multi-Line

2.3

*

*

*

Commercial P&C

18.5% 20.6% 21.7% 24.7%

Total Service / Sales Support

Personal Lines

22.6% 23.1% 21.7% 30.9%

Staff Payroll as % of LOB Revenue

Group Life & Health

59.1% 26.3%

*

27.6%

Multi-Line

20.2%

*

*

*

Personal Lines

11.2

11.3

15.6

12.2

Number of Carriers

Commercial Lines

11.9

22.8

20.2

23.9

Life & Health

7.5

13.2

7.2

15.2

Total PL Comms Placed (as % of PL Revenues) Total CL Comms Placed (as % of CL Revenues)

*

44.8% 25.6%

*

Service Center Use

2014 Best Practices Study

12.9%

8.6%

26.0% 13.6%

% of Agencies Making an Acquisition in the last 12 Months

16.7%

3.6%

0.0%

18.2%

159

*Insufficient Data

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